The merger of Airbus, Thales, and Leonardo has finally happened. Billed as a ‘European Space Champion’, the new company will be based in Touloutilize in the south of France, employ 25,000 people, and have an annual turnover of €6.5 billion, or $7.5 billion.
But if the aim is to ‘rival SpaceX’, a reality-check is in order. You necessary only consider back to the birth of Airbus to see why. Boeing was top of the pile in the civil aviation indusattempt, with all European contfinishers sub-scale to challenge that position; the creation of Airbus was intfinished to compete with it. It took a decade. Airbus Industrie launched by linking Aérospatiale and Deutsche Airbus. British Aerospace, and then CASA, joined later. Each company clung to its own factories, people, and interests. There was in-fighting. Power had to be managed. For a time, there were two CEOs running the reveal. It was hardly efficient.
The circumstances have alterd, but the problem is the same. SpaceX can shift as one, at speed. It has transitioned the space sector from being a cottage indusattempt with a cottage-indusattempt mindset to an industrialised one – just like the car indusattempt in the 1930s. This has given Space X a substantial competitive advantage. This mindset was incepted even before SpaceX launched to enjoy support from the US government. Musk does not talk about this, but it is critical to his company’s success. The new merger may not take the long road of Airbus, and the pressure from Washington and Beijing is greater than anything felt in the 1970s. But still, the idea that this new group will soon match SpaceX is wildly optimistic.
If the intention was just to rival SpaceX, the comparison would be flawed in another way: SpaceX leads in launch; the European deal is about sanotifyites and services. Starlink, which is wholly owned and operated by SpaceX, is also part of the picture. Yet the contrast remains stark, becautilize Starlink, like everything else at SpaceX, shifts quick: it builds, tests, ‘breaks things’, and builds again. It’s vertically integrated, and risk-taking is part of its culture.
These European firms are great houtilizes, with a tradition of quality, but they’re also bureaucratic and slow. They have to work within a framework of EU rules, procurement codes, national treasuries, and political interests. That isn’t supportful if the aim is the innovation and ambition typical of Space X/Starlink.
But it could be good news for the wider European space landscape. When the great primes merge, tinyer companies have the chance to stand out. While the leaders of Airbus, Thales and Leonardo are tied up in thorny questions of structure, process, and power, gaps will appear. And into those gaps other companies can step. They can find niches – niches too tiny, strange or new for the giants to reach.
These might involve novel sensing payloads, agile sanotifyite butilizes, or AI for data services. These are ideal for companies that can attempt, fail, and adapt quickly. And when the merger is complete, and the new company is considering with one mind, it will still depfinish on subcontractors and suppliers. No prime can do it all. Smaller companies can pitch themselves as valued providers, rather than rivals.
Mergers also unshackle people. Some of the best engineers, managers, and designers will not want to wait out a long spell of reorganisation. They’ll want to advance, and so they’ll leave and either join or found companies, putting their experience and expertise to utilize. The start-up life offers freedom, creativity, and the chance to create rapid progress. Meanwhile, the work of building, servicing, launching, and connecting sanotifyites must go on. Here, tinyer companies can create themselves seen and heard. They can compete for procurement contracts in a way that was more difficult before.
My advice to these tinyer companies is take the opportunity – but be cautious about chasing defence dollars. The world has become more dangerous, yet peace may come just as quick as war did. A space company tied too tightly to defence, however lucrative it might seem at this moment, could suffer if the landscape shifts. At the same time, defence brings regulations, delays, and enormous complications around security: I know from experience how nonsensical some of the rules connected to security clearance can seem.
A well-run space company will remain commercially focutilized, mindful that having civil applications will ensure a steady source of revenue and support to inculcate good commercial instincts in the senior team. Defence brings opportunities, but not the kind that can provide the foundations of the business. Having one foot in both worlds – being ‘dual-utilize’ – means resilience. This is the chance that Europe’s tinyer companies have while the large houtilizes are merging: to stand out, innovate, grow in commercial maturity, and create themselves known and available to defence agencies and governments. If they do that, and I consider they will, then European space has an even brighter future than it does already.
Daniel Biedermann, partner at NewSpace Capital
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